DP15972 A Scientific Approach to Innovation Management: Evidence from Four Field Experiments
|Author(s):||Arnaldo Camuffo, Alfonso Gambardella, Danilo Messinese, Elena Novelli, Emilio Paolucci, Chiara Spina|
|Publication Date:||March 2021|
|Keyword(s):||field experiments, Management Practices, Scientific entrepreneurship, strategic decision-making, uncertainty|
|JEL(s):||L21, L26, M13, M21|
|Programme Areas:||Organizational Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=15972|
Our model shows that managers and entrepreneurs make better decisions under uncertainty if they adopt a scientific approach in which they formulate and test theories. The model predicts that they are more likely to terminate projects with negative returns, commit to projects with positive returns, or pivot to projects with higher returns. We test these implications by combining the results of four Randomized Control Trials (RCTs) involving 754 start-ups and small-medium enterprises and 10,730 data points over time. The empirical analysis corroborates the predictions of the model.